SNGP declares Rs4.5 dividend per share for FY23

July 26, 2024 (MLN): Sui Northern Gas Pipelines Limited (PSX: SNGP) reported a profit after tax of Rs 10.56 billion (EPS: Rs 16.66) for the fiscal year ended June 30, 2023 (FY23), reflecting a meager 2% increase compared to earnings of Rs 10.37bn(EPS: Rs 16.34) in the same period last year (SPLY).

Along with the financial results, the company's Board of Directors (BoD) has declared a final cash dividend of Rs4.50 per share for the year.

According to the results, the company's gas sales inched up to Rs1.081tr compared to Rs1.076tr in FY22.

The tariff adjustment benefited the company significantly, amounting to Rs 377.51 billion, which is over 74% higher compared to the previous fiscal year.

To note, the settlement of circular debt, including tariff adjustment is dependent upon the resolution of intercorporate balances by the government of Pakistan, and an increase in gas prices or subsidy of the company, which clears the reason for higher tariff adjustment.

The cost of sales rose by 10.2% YoY, but this increase was smaller compared to the tariff-related jump SNGP received, leading to a significant 49% YoY improvement in gross profit to Rs127.46bn in FY23.

Accordingly, the gross margins improved to 8.7% as compared to 6.6% in SPLY.

However, the high inflation prevailing in the country increased SNGP's operating costs, which reduced its profit margins.

The company's administrative expenses rose 17.2% YoY to Rs9.93bn, selling and distribution expenses rose 16.5% YoY to Rs9.53bn, and other operating expenses increased 16.5% YoY to Rs6.02bn.

The company’s finance cost skyrocketed by 110.4% YoY and stood at Rs120.52bn as compared to Rs57.3bn in SPLY, mainly due to higher interest rates.

The expected credit loss on trade receivables faced by SNGP moved 63.29% up to Rs1.97bn.

On the positive side, SNGP's take or pay adjustments relevant to prior periods stood at nill in FY23, compared to the hectic burden of Rs13.77bn faced in FY22.

Moreover, other income marked an increase of 69.2% YoY to stand at Rs36.29bn in the review period as compared to Rs21.45bn in SPLY.

On the tax front, the company paid a higher tax worth Rs5.21bn against the Rs5.14bn paid in the corresponding period of last year, depicting a rise of 1.4% YoY.

In addition to the above, the company revealed that an event involving the misappropriation of certain store items was detected at the Central Base Manga store.

As a result, criminal proceedings were initiated and also a forensic audit to probe details of the matter is underway.

In view of the above, the company has made a provision of Rs418.356m in these financial statements.

Amount in thousand except for EPS

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